Oncimmune Holdings plc (LON:ONC), the leading global immunodiagnostics group, has provided a trading update for the 12 months ended 31 May 2021. The Company expects to announce its FY21 results in late September 2021.
FY21 revenues in line with market expectations with capital available to increase capacity for future contracts
The Company reports FY21 revenues of £5.6 million (FY20: £0.7 million), which is in line with market expectations and more than an eightfold increase on FY20. Additionally, the Company has also managed its cost base tightly during the year following the implementation of a cost reduction programme in FY20.
In March 2021, the Company completed an equity fundraise with gross proceeds of £9 million to provide additional funding to increase the ImmunoINSIGHTS commercial team headcount, principally in the US, as well as increasing the operational capacity at the Company’s laboratory facility in Dortmund, Germany. The programme to increase capacity to approximately 40,000 samples per annum by Q1 FY23, is proceeding to plan and will enable the Company to meet the increasing the demand from customers for its ImmunoINSIGHTS service offering.
During the year, the Company signed and delivered major ImmunoINSIGHTS contracts for Roche Pharmaceuticals (“Roche”) and Genentech, a member of the Roche Group, as well as a number of further contracts for biotechs and leading healthcare providers. In Q4 FY21, the Company launched its proprietary Infectious Diseases panel and shortly thereafter signed substantial new contracts with Roche and Cedars-Sinai Medical Center (“Cedars-Sinai”), with the majority of revenue from these contracts due to be realised in FY22.
Additionally, in Q4 FY21, the Company signed a new autoantibody profiling study with a leading US-based global pharmaceutical company. This programme will evaluate the autoantibody profiles of patient samples in immuno-oncology and autoimmune trials and is scheduled to complete in Q2 FY22. During Q4 FY21, the Company also agreed an extension to the existing Master Services Agreement with Cedars-Sinai Medical Center, Los Angeles. Under this new arrangement, which is structured as a Service Level Agreement (“SLA”), the Company will analyse samples from multiple COVID-19 projects funded by Cedars-Sinai using the Company’s proprietary Infectious Diseases panel to support Cedars-Sinai’s ongoing COVID-19 research into the immune response to the disease. This evolution from an order driven engagement to a partnership underpinned by an SLA is an example of Oncimmune’s commitment to support its collaborators over the longer term, and their recognition of the value-adding insights that immune-phenotyping brings to both drug discovery and real world research scenarios. This fourth agreement gives Cedars-Sinai the flexibility to build upon and adjust the focus of their research as the global response to the pandemic evolves.
Within the EarlyCDT® product business the Company also achieved success, having signed commercial contracts to supply the EarlyCDT Lung blood test within the NHS. Oncimmune is pleased to report that since signing these initial contracts, the Company has agreed a further NHS supply contract in Q4 FY21 which is scheduled to commence revenue generation from Q1 FY22. It is expected that further NHS supply contracts will be signed in the near term. As previously reported, the Company’s US partner for EarlyCDT Lung, Biodesix, Inc (“Biodesix”) has seen a strong recovery in demand for the EarlyCDT Lung test in the US, as the effects of the COVID-19 pandemic subside, and they expect demand to increase further throughout FY22.
Strong outlook for FY22 as ImmunoINSIGHTS service contracts are expected to be converted into strategic commercial partnerships
During FY20 the Company laid the foundations for commercial success following the acquisition of Protagen Diagnostics AG (now known as Oncimmune Germany GmbH) in March 2019, and the resultant ImmunoINSIGHTS offering has emerged through the global pandemic in FY21 as a robust and resilient growth engine for the Company. The ImmunoINSIGHTS business presents shareholders with a base of profitable revenue, layered with upside optionality from retained rights to foreground IP emanating from the contracts delivered for biotech and pharmaceutical customers. FY22 will nonetheless represent another step change in revenue growth, as the commercial pipeline is converted into service contracts and subsequently into multiple projects and broader strategic commercial partnerships with associated long term revenue potential.
The ImmunoINSIGHTS pipeline of qualified commercial opportunities has continued to grow throughout FY21 and currently stands at more than 160. A number of these opportunities are in late stage legal documentation and, as a consequence, the Company expects to sign these new contracts in Q1 FY22. These studies have been programmed into the Company’s forward production schedule, which entails identifying and assigning the resources required to deliver each contract. Of particular note in this schedule are two contracts for major pharmaceutical companies which represent substantial follow-on validation contracts.
The anticipated signing of these new contracts in Q1 FY22 together with those contracts already signed in FY21 is expected to deliver revenue of approximately 50% of the FY22 market expectations for the ImmunoINSIGHTS business. With this high degree of visibility of revenue at the beginning of the financial year, we are confident in the Group’s ability to deliver management’s revenue expectations for FY22.
In view of the growth in the ImmunoINSIGHTS commercial pipeline, the Company’s is actively considering establishing a duplicate laboratory facility in the US to directly service its US client base. Currently over 90% of the Company’s commercial revenues for this business are sourced from US-based pharmaceutical companies and biotechs, and the building by the Company of a US-based ImmunoINSIGHTS business development team would be expected to complement a new facility.
In addition, the Company’s EarlyCDT product business is beginning to see an improvement in commercial activity following the impact of COVID-19 on FY20 and FY21. The Company’s product sales into the NHS continue to grow and it is receiving increasing demand for deliveries of product into the US to Biodesix.
Dr Adam M Hill, CEO of Oncimmune said: “Despite FY21 being a challenging year for us all with the backdrop of COVID-19, I have been humbled by the individual dedication and professional commitment shown by all within the Oncimmune team, enabling us to stick to the schedule laid out in our three-year forward strategy. We were able to deliver the second and third pillars of our strategy – moving into patient selection through partnerships with pharma companies – through the launch of ImmunoINSIGHTS, while we have continued to successfully access both the UK and US markets with EarlyCDT Lung providing sales channels from which we can build.
“The Company has delivered outstanding top line growth – an average of over 40% quarter upon quarter growth over the last 8 periods. ImmunoINSIGHTS has also proven its ability as a stand-alone business, and we anticipate this will be an enabler of future investment and growth looking forward.”